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COMPANIES ACT 1990

COMPANIES ACT 1990 - LONG TITLE
AN ACT TO AMEND THE LAW RELATING TO COMPANIES AND TO PROVIDE FOR RELATED MATTERS.
[22nd December, 1990]
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
COMPANIES ACT 1990 - PART XI
- ACQUISITION OF OWN SHARES AND SHARES IN HOLDING COMPANY
COMPANIES ACT 1990 - SECT 206
Interpretation.
206.—In this Part—
'the Act of 1983' means the Companies (Amendment) Act, 1983;
"company" means a company to which section 207 relates;
"distribution" has the meaning assigned to it by section 51 (2) of
the Act of 1983 (as amended by section 232 (d) and (e) of this
Act);
"redeemable shares" includes shares which are liable at the option
of the company or the shareholder to be redeemed.
COMPANIES ACT 1990 - SECT 207
Power to issue redeemable shares.
207.—(1) Subject to the provisions of this Part, a company limited
Power to issue by shares or limited by guarantee and having a
share capital may, so authorised by its articles, issue redeemable
shares and redeem them accordingly.
(2) The issue and redemption of shares by a company pursuant to
subsection (1) shall be subject to the following conditions—
( a ) No redeemable shares shall be issued or redeemed at any
time when the nominal value of the issued share capital which is
not redeemable is less than one tenth of the nominal value of the
total issued share capital of the company.
( b ) No such shares shall be redeemed unless they are fully
paid.
( c ) The terms of redemption must provide for payment on
redemption.
( d ) (i) Subject to subparagraph (ii), no such shares shall be
redeemed otherwise than out of profits available for distribution.
(ii) Where the company proposes to cancel shares on redemption
pursuant to section 208, such shares may also be redeemed out of
the proceeds of a fresh issue of shares made for the purposes of
redemption.
( e ) The premium, if any, payable on redemption, must, subject to
paragraph (f), have been provided for out of the said profits of
the company.
( f ) Where the shares were issued at a premium, any premium
payable on their redemption (being a redemption to which paragraph
(d) (ii) applies) may be paid out of the proceeds of a fresh
issue of shares made for the purposes of the redemption, up to an
amount equal to—
(i) the aggregate of the premiums received by the company on the
issue of the shares redeemed, or
(ii) the current amount of the company's share premium account
(including any sum transferred to that account in respect of
premiums on the new shares),
whichever is the less, and in any such case the amount of the
company's share premium account shall, not withstanding anything in
section 62 (1) of the Principal Act, be reduced by a sum
corresponding (or by sums in the aggregate corresponding) to the
amount of any payment made by virtue of this paragraph out of the
proceeds of the issue of the new shares.
(3) Subject to the provisions of this Part, the redemption of
shares may be effected on such terms and in such manner as may be
provided by the articles of the company.
COMPANIES ACT 1990 - SECT 208
Cancellation of shares on redemption.
208.—Shares redeemed pursuant to this Part may be cancelled on
shares on redemption. redemption, in which case the following
provisions shall apply as respects those shares:
( a ) The amount of the company's issued share capital shall be
reduced by the nominal value of the shares redeemed but no such
cancellation shall be taken as reducing the amount of the company's
authorised share capital.
( b ) Where the shares are—
(i) redeemed wholly out of the profits available for distribution,
or
(ii) redeemed wholly or partly out of the proceeds of a fresh
issue and the aggregate amount of those proceeds (disregarding any
part of those proceeds used to pay any premium on redemption) is
less than the aggregate nominal value of the shares redeemed ("the
aggregable difference"),
then a sum equal to, in the case of subparagraph (i), the nominal
amount of the shares redeemed and, in the case of subparagraph
(ii), the aggregable difference shall be transferred to a reserve
fund ("the capital redemption reserve fund") and the provisions of
The Principal Act relating to the reduction of the share capital of
a company shall, except as provided in this section, apply as if
the capital redemption reserve fund were paid-up share capital of
the company.
( c ) Where a company—
(i) has redeemed and cancelled shares, or
(ii) is about to redeem shares and cancel them upon redemption,
it shall have the power to issue shares up to the nominal amount
of the shares redeemed or to be redeemed as if those shares had
never been issued and for the purposes of section 68 of the
Finance Act, 1973, shares issued by a company in place of shares
redeemed under this Part shall constitute a chargeable transaction
if, but only if, the actual value of the shares so issued exceeds
the actual value of the shares redeemed at the date of their
redemption and, where the issue of shares does constitute a
chargeable transaction for those purposes, the amount on which stamp
duty on the relevant statement relating to that transaction is
chargeable under section 69 of the Finance Act, 1973, shall be the
difference between—
(I) the amount on which the duty would be so chargeable if the
shares had not been issued in place of shares redeemed under this
section, and
(II) the value of the shares redeemed at the date of their
redemption.
( d ) Where new shares are issued before the redemption of the
old shares, the new shares shall not, so far as relates to stamp
duty, be deemed to have been issued in pursuance of paragraph (c)
unless the old shares are redeemed within one month after the issue
of the new shares
( e ) The capital redemption reserve fund may, notwithstanding
anything in this section, be applied by the company in paying up
unissued shares of the company (other than redeemable shares) to be
allotted to members of the company as fully paid bonus shares.
COMPANIES ACT 1990 - SECT 209
Treasury shares.
209.—(1) Subject to the provisions of this section, a company may
instead of cancelling shares upon their redemption hold them (as
"treasury shares") and shares so held may be dealt with by the
company in the manner provided for in subsection (4) but not
otherwise.
( 2 ) ( a ) The nominal value of treasury shares held by a
company may not, at any one time, exceed ten per cent of the
nominal value of the issued share capital of the company.
( b ) For the purposes of paragraph (a), the following shall also
be deemed to be shares held by the company—
(i) shares held in the company by any subsidiary in pursuance of
section 224, and
(ii) shares held in the company by any subsidiary in pursuance of
section 9 of the Insurance Act, 1990, and
(iii) shares held in the company by any person acting in his own
name but on the company's behalf.
(3) For so long as the company holds shares as treasury shares—
( a ) the company shall not exercise any voting rights in respect
of those shares and any purported exercise of those rights shall be
void; and
( b ) no dividend or other payment (including any payment in a
winding up of the company) shall be payable to the company in
respect of those shares.
(4) Treasury shares may either be—
( a ) cancelled by the company in which case the provisions of
section 208 shall apply as if the shares had been cancelled on
redemption, or
( b ) subject to subsections (5) and (6), may be re-issued as
shares of any class or classes.
(5) A re-issue of shares under this section shall be deemed for
all the purposes of the Companies Acts to be an issue of shares
but the issued share capital of the company shall not be regarded
for any purpose (including the purposes of any enactments relating
to stamp duties) as having been increased by the re-issue of the
shares.
( 6 ) (a) The maximum and minimum prices at which treasury shares
may be re-issued off-market ("the re-issue price range") shall be
determined in advance by the company in general meeting in
accordance with paragraphs (b), (c) and (d) and such determination
may fix different maximum and minimum prices for different shares.
( b ) Where the treasury shares to be re-issued are derived in
whole or in part from shares purchased by the company in accordance
with the provisions of this Part the re-issue price range of the
whole or such part (as the case may be) of those shares shall be
determined by special resolution of the company passed at the
meeting at which the resolution authorising the said purchase has
been passed and such determination shall, for the purposes of this
subsection, remain effective with respect to those shares for the
requisite period.
( c ) Where the treasury shares to be re-issued are derived in
whole or in part from shares redeemed by the company in accordance
with the provisions of this Part the re-issue price range of the
whole or such part (as the case may be) of those shares shall be
determined by special resolution of the company passed before any
contract for the re-issue of those shares is entered into and such
determination shall, for the purposes of this subsection, remain
effective with respect to those shares for the requisite period.
( d ) The company may from time to time by special resolution
vary or renew a determination of re-issue price range under
paragraph (b) or (c) with respect to particular treasury shares
before any contract for re-issue of those shares is entered into
and any such variation or renewal shall, for the purposes of this
subsection, remain effective as a determination of the re-issue price
range of those shares for the requisite period.
( e ) (i) For the purposes of determining in this subsection
whether treasury shares are re-issued off-market, the provisions of
section 212 (off-market and market purchases) shall have effect with
the substitution of the words "re-issue", "off-market re-issue" and
"reissued" respectively for the words "purchase", "off market
purchase" and "purchased" in subsection (1) ( a ) of that section.
(ii) In this subsection, "the requisite period" means the period of
eighteen months from the date of the passing of the resolution
determining the re-issue price range or varying or renewing (as the
case may be) such determination or such lesser period of time as
the resolution may specify.
(7) A re-issue by a company of treasury shares in contravention of
any of the provisions of subsection (6) shall be unlawful.
COMPANIES ACT 1990 - SECT 210
Power to convert shares into redeemable shares.
210.—(1) Subject to subsections (2), (3), (4) and (5) and the
provisions of the Companies Acts governing the variation of rights
attached to classes of shares and the alteration of a company's
memorandum or articles, a company may convert any of its shares
into redeemable shares.
(2) A conversion of shares under subsection (1) shall not have
effect with respect to any shares, the holder of which notifies the
company, before the date of conversion, of his unwillingness to have
his shares converted but, subject to that and the other provisions
of this section, the conversion shall have effect according to its
terms.
(3) Subsection (2) shall not, where a shareholder objects to a
conversion, prejudice any right he may have under the Companies Acts
or otherwise to invoke the jurisdiction of the court to set aside
the conversion or otherwise provide relief in respect thereof.
(4) No shares shall be converted into redeemable shares if as a
result of the conversion the nominal value of the issued share
capital which is not redeemable would be less than one tenth of
the nominal value of the total issued share capital of the company.
(5) The provisions of sections 207, 208 and 209 shall apply to
shares which have been converted into redeemable shares under this
section.
COMPANIES ACT 1990 - SECT 211
Power of company to purchase own shares.
211.—(1) Subject to the following provisions of this Part, a company
may, if so authorised by its articles, purchase its own shares
(including any redeemable shares).
(2) Sections 207 (2), 208 and 209 shall apply in relation to the
purchase by a company under this section of any of its own shares
as those sections apply in relation to the redemption of shares by
a company under section 207.
(3) A company shall not purchase any of its shares under this
section if as a result of such purchase the nominal value of the
issued share capital which is not redeemable would be less than one
tenth of the nominal value of the total issued share capital of
the company.
COMPANIES ACT 1990 - SECT 212
Off-market and market purchases.
212.—(1) For the purposes of sections 213 and 215, a purchase by
market purchases. a company of its own shares is
( a ) an "off-market purchase" if the shares are purchased either
(i) otherwise than on a recognised stock exchange, or
(ii) on a recognised stock exchange but are not subject to a
marketing arrangement on that stock exchange,
( b ) a "market purchase" if the shares are purchased on a
recognised stock exchange and are subject to a marketing arrangement.
(2) For the purposes of subsection (1), a company's shares are
subject to a marketing arrangement on a recognised stock exchange if
either
( a ) they are listed on that stock exchange, or
( b ) the company has been afforded facilities for dealings in
those shares to take place on that stock exchange without prior
permission for individual transactions from the authority governing
that stock exchange and without limit as to the time during which
those facilities are to be available.
COMPANIES ACT 1990 - SECT 213
Authority for off-market.
213.—(1) A company shall not make an off-market purchase of its own
shares otherwise than in pursuance of a contract authorised in
advance in accordance with this section.
(2) The terms of the proposed contract of purchase shall be
authorised by special resolution before the contract is entered into
and any such authority may be varied, revoked or from time to time
renewed by special resolution.
(3) A special resolution under subsection (2) shall not be effective
for the purposes of this section if any member of the company
holding shares to which the resolution relates exercises the voting
rights carried by any of those shares in voting on the resolution
and the resolution would not have been passed if he had not done
so.
(4) Notwithstanding anything contained in section 137 of the
Principal Act or in a company's articles, any member of the company
may demand a poll on a special resolution under subsection (2).
(5) A special resolution under subsection (2) shall not be effective
unless a copy of the proposed contract of purchase or, if the
contract is not in writing, a written memorandum of its terms is
available for inspection by members of the company both—
( a ) at the registered office of the company for not less than
the period of 21 days ending with the date of the meeting at
which the resolution is passed, and
( b ) at the meeting itself.
(6) Any memorandum of the terms of the contract of purchase made
available for the purposes of this section must include the names
of any members holding shares to which the contract relates, and
any copy of the contract made available for those purposes must
have annexed to it a written memorandum specifying any such names
which do not appear in the contract itself.
(7) A company may agree to a variation of an existing contract of
purchase approved under this section only if the variation is
authorised by special resolution of the company before it is agreed
to, and subsections (2) to (5) shall apply in relation to that
authority save that a copy or memorandum (as the case may require)
of the existing contract must also be available for inspection in
accordance with subsection (5).
COMPANIES ACT 1990 - SECT 214
Contingent purchase contract.
214.—(1) In this section "contingent purchase contract" means a
contract entered into by a company and relating to any of its
shares which does not amount to a contract to purchase those shares
but under which the company may become entitled or obliged to
purchase those shares.
(2) A company shall only make a purchase of its own shares in
pursuance of a contingent purchase contract if the terms of the
contract have been authorised by a special resolution of the company
before the contract is entered into and subsections (2) to (7) of
section 213 shall apply to such contract and resolution.
COMPANIES ACT 1990 - SECT 215
Authority for market purchase.
215.—(1) A company shall not make a market purchase of its own
shares unless the purchase has first been authorised by the company
in general meeting and any such authority may be varied, revoked or
from time to time renewed by the company in general meeting. This
subsection shall not be construed as requiring any particular
contract for the market purchase of shares to be authorised by the
company in general meeting and for the purposes of this Part where
a market purchase of shares has been authorised in accordance with
this section any contract entered into pursuant to that authority in
respect of such a purchase shall be deemed also to be so
authorised.
(2) section 143 of the Principal Act shall apply to a resolution
under subsection (1).
(3) In the case of a public limited company, any authority granted
under subsection (1) shall
( a ) specify the maximum number of shares authorised to be
acquired; and
( b ) determine both the maximum and minimum prices which may be
paid for the shares.
(4) A resolution to which subsection (3) applies may determine
either or both the prices mentioned in paragraph (b) of that
subsection by—
( a ) specifying a particular sum; or
( b ) providing a basis or formula for calculating the amount of
the price in question without reference to any person's discretion
or opinion.
COMPANIES ACT 1990 - SECT 216
Duration of authority granted by public limited companies to purchase
own shares.
216.—(1) Without prejudice to the generality of sections 213, 214
and 215, in the case of a public limited company, any authority
granted under those sections shall specify the date on which the
authority is to expire which shall not be later than 18 months
after the date on which the special resolution or ordinary
resolution, as the case may be, granting the authority is passed.
(2) A public limited company may make a purchase after the expiry
of any time limit imposed by virtue of subsection (1) in any case
where the contract of purchase was concluded before the authority
expired and the terms of the authority permit the company to make
a contract of purchase which would or might be executed wholly or
partly after the authority expired.
COMPANIES ACT 1990 - SECT 217
Assignment or release of company's right to purchase own shares.
217.—(1) Any purported assignment of the rights of a company under
any contract authorised under section 213, 214 or 215 shall be
void.
(2) Nothing in subsection (1) shall prevent a company from releasing
its right under any contract authorised under section 213, 214 or
215 provided that, in the case of a contract authorised under
section 213 or 214, the release has been authorised by special
resolution of the company before the release is entered into, and
any such purported release by a company which has not been
authorised as aforesaid shall be void.
(3) Subsections (2) to (7) of section 213 shall apply to a
resolution under subsection (2).
COMPANIES ACT 1990 - SECT 218
Incidental payments with respect to purchase of own shares.
218.—(1) Any payment made by a company in consideration of—
( a ) acquiring any right with respect to the purchase of its own
shares in pursuance of a contract authorised under section 214, or
( b ) the variation of a contract authorised under section 213 or
214, or
( c ) the release of any of the company's obligations with respect
to the purchase of any of its own shares under a contract
authorised under section 213, 214 or 215
shall be unlawful if any such payment is made otherwise than out
of distributable profits of the company.
(2) If the requirements of subsection (1) are not satisfied in
relation to a contract—
( a ) in a case to which paragraph (a) of that subsection
applies, no purchase by the company of its own shares in pursuance
of that contract shall be lawful under this Part;
( b ) in a case to which paragraph (b) of that subsection
applies, no such purchase following the variation shall be lawful
under this Part; and
( c ) in a case to which paragraph (c) of that subsection
applies, the purported release shall be void.
COMPANIES ACT 1990 - SECT 219
Effect of company's failure to redeem or purchase.
219.—(1) This section applies to—
( a ) redeemable shares issued after the coming into operation of
or purchase. this Part;
( b ) shares which have been converted into redeemable shares
pursuant to section 210; and
( c ) shares which a company has agreed to purchase pursuant to
section 213, 214 or 215.
(2) Without prejudice to any other right of the holder of any
shares to which this section applies a company shall not be liable
in damages in respect of any failure on its part to redeem or
purchase any such shares.
(3) The court shall not grant an order for specific performance of
the terms of redemption or purchase of the shares to which this
section applies if the company shows that it is unable to meet the
cost of redeeming or purchasing the shares out of profits available
for distribution.,
(4) Where at the commencement of the winding up of a company any
shares to which this section applies have not been redeemed or
purchased then, subject to subsections (5), (6) and (7), the terms
of redemption or purchase may be enforced against the company and
the shares when so redeemed or purchased under this subsection shall
be treated as cancelled.
(5) Subsection (4) shall not apply if
( a ) the terms of redemption or purchase provided for the
redemption or purchase to take place at a date later than that of
the commencement of the winding-up, or
( b ) during the period beginning with the date on which the
redemption or purchase was to have taken place and ending with the
commencement of the winding-up the company could not at any time
have lawfully made a distribution equal in value to the price at
which the shares were to have been redeemed or purchased.
(6) There shall be paid in priority to any amount for which the
company is liable by virtue of subsection (4) to pay in respect of
any shares—
( a ) all other debts and liabilities of the company other than
any due to members in their character as such, and
( b ) if other shares carry rights, whether as to capital or to
income, which are preferred to the rights as to capital attaching
to the first mentioned shares, any amount due in satisfaction of
those preferred rights,
but subject as aforesaid, any such amount shall be paid in priority
to any amounts due to members in satisfaction of their rights
(whether as to capital or income) as members.
(7) Where by virtue of the application by section 284 of the
Principal Act of the rules of bankruptcy in the winding-up of
insolvent companies a creditor of a company is entitled to payment
of any interest only after payment of all other debts of the
company, the company's debts and liabilities shall for the purposes
of subsection (6) include the liability to pay that interest.
COMPANIES ACT 1990 - SECT 220
Redemption of existing redeemable preference shares.
220.—section 64 of the Principal Act is hereby repealed but any
redeemable preference shares issued by a company limited by shares
before the coming into operation of this Part which could but for
the repeal of section 64 have been redeemed under that section
shall be subject to redemption in accordance with the provisions of
this Part save that any premium payable on redemption may,
notwithstanding section 207 (2) (e) and (f), be paid out of the
share premium account instead of out of profits or may be paid
partly out of that account and partly out of profits available for
distribution.
COMPANIES ACT 1990 - SECT 221
Construction of reference to redeemable preference shares.
221.—A references to redeemable preference shares. in—
( a ) section 69 (1) ( e ) of, and the Second, Third, Fourth
and Sixth Schedules to, The Principal Act, and
( b ) section 55 (1) ( h ) of the Act of 1983,
shall be construed as a reference to redeemable shares.
COMPANIES ACT 1990 - SECT 222
Retention and inspection of documents.
222.—(1) Every company which enters into a contract under section.
213, 214 or 215 shall, until the expiration of ten years after the
contract has been fully performed, keep at its registered office a
copy of that contract or, if it is not in writing, a memorandum
of its terms.
(2) Every document required to be kept under subsection (1) shall
during business hours (subject to such reasonable restrictions as the
company in general meeting may impose, so that not less than 2
hours in each day be allowed for inspection) be open to the
inspection of any member and, if the company is a public limited
company, of any other person.
(3) If a company fails to comply with this section, the company
and every officer of the company who is in default shall be guilty
of an offence.
(4) In the case of a refusal of an inspection of a document
required under subsection (2), the court may, on the application of
a person who has requested an inspection and has been refused, by
order require the company to allow the inspection of that document.
COMPANIES ACT 1990 - SECT 223
Application of section 108 (6) to dealings by company in its own
securities.
223.—Subsection (6) of , section 108, in its application to dealings
by a company in its own securities, shall not preclude a company
from dealing in its own shares at any time by reason only of
information in the possession of an officer of that company if—
( a ) the decision to enter into the transaction was taken on its
behalf by a person other than the officer, and
( b ) the information was not communicated to that person and no
advice relating to the transaction was given to him by a person in
possession of the information.
COMPANIES ACT 1990 - SECT 224
Holding by subsidiary of shares in its holding company.
224.—(1) Notwithstanding sections 32 and 60 of the Principal Act a
company may, subject to the provisions of this section, acquire, and
hold shares in a company which is its holding company
(2) The acquisition and holding by a subsidiary under subsection (1)
of shares in its holding company shall be subject to the following
conditions:
( a ) The consideration for the acquisition of such shares shall
be provided for out of the profits of the subsidiary available for
distribution.
( b ) Upon the acquisition of such shares and for so long as the
shares are held by the subsidiary—
(i) the profits of the subsidiary available for distribution shall
for all purposes be restricted by a sum equal to the total cost
of the shares acquired;
(ii) the shares shall, for the purposes of the consolidated accounts
prepared by the holding company in accordance with sections 150 to
152 of The Principal Act, be treated in the same manner as is
required in respect of shares held as treasury shares under section
43A of the Act of 1983 (inserted by section 232 (c) of this Act);
and.
(iii) the subsidiary shall not exercise any voting rights in respect
of the shares and any purported exercise of those rights shall be
void.
(3) A contract for the acquisition (whether by allotment or
transfer) by a subsidiary of shares in its holding company shall
not be entered into without being authorised in advance both by the
subsidiary and its holding company and the provisions of sections
212 to 217217 shall apply, with the necessary modifications, to the
granting, variation, revocation and release of such authority.
(4) For the purposes of this section, a subsidiary's profits
available for distribution shall not include the profits attributable
to any shares in the subsidiary for the time being held by the
subsidiary's holding company so far as they are profits for the
period before the date on or from which the shares were acquired
by the holding company.
(5) This section shall not apply to shares held by a subsidiary in
its holding company in the circumstances permitted by section 32 of
the Principal Act.
(6) This section, except subsection (2) (b) (iii), shall not apply
to shares subscribed for, purchased or held by a subsidiary in its
holding company pursuant to section 9 (1) of the Insurance Act,
1990.
COMPANIES ACT 1990 - SECT 225
Civil liability for improper purchase in holding company.
225.—(1) Where the winding-up of a company which has acquired shares
in its holding company in accordance with section 224 commence
within six months after such acquisition and the company is at the
time of the commencement of the winding-up unable to pay its debts
(taking into account the contingent and prospective liabilities),the
court, on the application of a liquidator, creditor, employee or
contributory of the company, may subject to subsection (2), declare
that the directors of the company shall be jointly and severally
liable to repay to the company the total amount paid by the
company for the shares.
(2) Where it appears to the court that any person in respect of
whom a declaration has been sought under subsection (1) believed on
reasonable grounds that the said purchase was in the best interests
of the company, the court may relieve him, either wholly or in
part, from personal liability on such terms as it may think fit.
COMPANIES ACT 1990 - SECT 226
Return to be made to registrar.
226.—(1) Every company which has purchased shares pursuant to this
Part shall, within 28 days after delivery to the company of those
shares, deliver to the registrar for registration a return in the
prescribed form stating with respect to shares of each class
purchased the number and nominal value of those shares and the date
on which they were delivered to the company.
(2) In the case of a public limited company, the return shall also
state—
( a ) the aggregate amount paid by the company for the shares,
and
( b ) the maximum and minimum prices paid in respect of each
class purchased.
(3) Particulars of shares delivered to the company on different
dates and under different contracts may be included in a single
return to the registrar, and in such a case the amount required to
be stated under subsection (2) (a) shall be the aggregate amount
paid by the company for all the shares to which the return
relates.
(4) If a company fails to comply with the requirements of this
section, the company and every officer who is in default shall be
guilty of an offence.
(5) Summary proceedings in relation to an offence under this section
may be brought and prosecuted by the registrar of companies.
COMPANIES ACT 1990 - SECT 227
Amendment of section 89 of the Principal Act.
227.—The following section is hereby substituted for section 89 of
the Principal Act:
"Validation of invalid issue, redemption or purchase of shares.
89.—(1) If a company has created or issued shares in its capital
or acquired any of its shares by a redemption or purchase in
purported compliance with Part XI of the Companies Act, 1990, and
if there is reason to apprehend that such shares were invalidly
created, issued or acquired as aforesaid, the court may, on the
application of the company, any holder or former holder of such
shares or any member or former member or creditor, or the
liquidator, of the company, declare that such creation, issue or
acquisition shall be valid for all purposes if the court is
satisfied that it would be just and equitable to do so and
thereupon such shares shall from the creation, issue or acquisition
thereof, as the case may be, be deemed to have been validly
created, issued or acquired.
(2) Where shares have been redeemed or purchased in contravention of
paragraph (d), (e) or (f) of section 207 (2) or section 207 (3)
of the Companies Act, 1990, then the court shall not make a
declaration under subsection (1) above in respect of those shares.
(3) The grant of relief by the court under this section shall, if
the court so directs, not have the effect of relieving the company
or its officers of any liability incurred under section 41 (3) of
the Companies (Amendment) Act, 1983.".
COMPANIES ACT 1990 - SECT 228
Regulations as to purchase of shares.
228.—(1) The Minister may make regulations governing the purchase by
companies of their own shares or of shares in their holding company
and the sale by companies of their own shares held as treasury
shares and such regulations may relate to companies in general or
to a particular category or class of company.
(2) Without prejudice to the generality of subsection (1),
regulations under this section may provide for in particular—
( a ) the class or description of shares which may (or may not)
be purchased or sold,
( b ) the price at which they may be purchased or sold,
( c ) the timing of such purchases or sales,
( d ) the method by which the shares may be purchased or sold,
and
( e ) the volume of trading in the shares which may be carried
out by companies.
(3) If a company fails to comply with the provisions of regulations
made under this section, the company and every officer who is in
default shall be guilty of an offence.
COMPANIES ACT 1990 - SECT 229
Duty of company to notify stock exchange.
229.—(1) Whenever shares for which dealing facilities are provided on
a recognised stock exchange have been purchased either by the
company which issued the shares or by a company which is that
company's subsidiary, the company whose shares have been purchased
shall be under an obligation to notify that stock exchange of that
matter; and the stock exchange may publish, in such manner as it
may determine, any information received by it under this subsection.
(2) An obligation imposed by subsection (1) shall be fulfilled
before the end of the day next following that on which it arises.
(3) If default is made in complying with this section, the company
and every officer of the company who is in default shall be guilty
of an offence.
COMPANIES ACT 1990 - SECT 230
Duty of stock exchange in relation to unlawful purchases.
230.—(1) If it appears to a relevant authority of a recognised
stock exchange that a company in the case of whose shares dealing
facilities relation to have been provided on that stock exchange has
committed an offence under section 228 or 229, such authority shall
forthwith report the matter to the Director of Public Prosecutions
and shall furnish to the Director of Public Prosecutions such
information and give to him such access to and facilities for
inspecting and taking copies of any documents, being information or
documents in the possession or under the control of such authority
and relating to the matter in question, as the Director of Public
Prosecutions may require.
(2) Where it appears to a member of a recognised stock exchange
that any person has committed an offence under section 228 or 229,.
he shall report the matter forthwith to a relevant authority of the
recognised stock exchange concerned, who shall thereupon come under
the duty referred to in subsection (1).
(3) If it appears to a court in any proceedings that any person
has committed an offence as aforesaid, and that no report relating
to the matter has been made to the Director of Public Prosecutions
under subsection (1), that court may, on the application of any
person interested in the proceedings concerned or of its own motion,
direct the relevant authority of the recognised stock exchange
concerned to make such a report, and on a report being made
accordingly, this section shall have effect as though the report had
been made in pursuance of subsection (1).
(4) If, where any matter is reported or referred to the Director
of Public Prosecutions under this section, he considers that the
case is one in which a prosecution ought to be instituted and
institutes proceedings accordingly, it shall be the duty of a
relevant authority of the recognised stock exchange concerned, and of
every officer of the company whose shares are concerned, and of any
other person who appears to the Director of Public Prosecutions to
have relevant information (other than any defendant in the
proceedings) to give all assistance in connection with the
prosecution which he or they are reasonably able to give.
(5) If it appears to the Minister, arising from a complaint to a
relevant authority of a recognised stock exchange concerning an
alleged offence under section 228 or 229, that there are
circumstances suggesting that
( a ) the relevant authority ought to use its powers under this
section but has not done so, or
( b ) that a report ought to be made to the Director of Public
Prosecutions under subsection (1), but that the relevant authority
concerned has not so reported,
he may request the relevant authority to use such powers or make
such a report, and on a report being made accordingly, this section
shall have effect as though the report had been made in pursuance
of subsection (1).
(6) Where the Minister makes a request under subsection (5), the
relevant authority concerned shall communicate the results of its
investigations, or a copy of its report under subsection (1), as
the case may be, to the Minister.
(7) A relevant authority of a recognised stock exchange shall not
be liable in damages in respect of anything done or omitted to be
done by the authority in connection with the exercise by it of its
functions under this section unless the act or omission complained
of was done or omitted to be done in bad faith.
(8) For the purposes of this section each of the following shall
be a "relevant authority" in relation to a recognised stock
exchange—
(i) its board of directors, committee of management or other
management body,
(ii) its manager, however described.
(9) A relevant authority shall have the same powers and duties for
the purposes of this section as it has under sections 117 and 120.
(10) Where the Minister considers it necessary or expedient to do
so for the proper and effective administration of this section, he
may make such regulations as he thinks appropriate in relation to—
( a ) the powers of authorised persons, or
( b ) the matters in respect of which, or the persons from whom,
authorised persons may require information under section 117, as
applied by subsection (9).
COMPANIES ACT 1990 - SECT 231
Amendments to the Principal Act in respect of share capital.
231.—(1) The Principal Act is hereby amended—
( a ) in section 62 (1) by the insertion after "except as
provided in this section" of "and section 207 (2) of the Companies
Act, 1990,";
( b ) in section 62 (2) by the deletion of "preference" where it
first appears and the insertion after "on redemption of any
redeemable preference shares" of "in pursuance of section 220 of the
Companies Act, 1990, "; and
( c ) in section 72 (1) by the deletion of "to purchase any of
its shares or".
(2) The Sixth Schedule to The Principal Act is hereby amended by
the substitution of the following subparagraph for subparagraph (d) 5
of paragraph 12:
"( d ) the amounts respectively provided for purchase of the
company's share capital, for redemption of share capital and for
redemption of loans;".
COMPANIES ACT 1990 - SECT 232
Amendments to the Act of 1983.
232.—The Act of 1983 is hereby amended—
( a ) by the substitution in section 41 (4) of the following
paragraph for paragraph ( a ):
"( a ) the redemption of preference shares in pursuance of section
65 of the Principal Act or the redemption or purchase of shares in
pursuance of Part XI of the Companies Act, 1990,"
( b ) by the deletion of section 43 (13);
( c ) by the insertion after section 43 of the following new
section:
"Accounting for own shares
43A.—Where a company or a nominee of a company holds shares in the
company or an interest in such shares, such shares shall not be
shown in the balance sheet of the company as an asset, but—
( a ) the deduction of the cost of the acquired shares from the
profits available for distribution, and
( b ) the nominal value of such shares,
shall be disclosed in the notes to the accounts and the profits
available for distribution shall accordingly be restricted by the
amount of such deduction.";
( d ) by the substitution in section 51 (2) of the following
paragraph for paragraph (b):
"( b ) the redemption of preference shares pursuant to section 65
of the Principal Act out of the proceeds of a fresh issue of
shares made for the purposes of redemption;"; and
( e ) by the addition of the following paragraph after the
paragraph inserted by paragraph (d):
"( bb ) the redemption or purchase of shares pursuant to Part XI
of the Companies Act, 1990 out of the proceeds of a fresh issue
of shares made for the purposes of the redemption or purchase and
the payment of any premium out of the company's share premium
account on a redemption pursuant to section 220 in the said Part;".
COMPANIES ACT 1990 - SECT 233
Amendments to the Companies (Amendment) Act, 1986,.
233.—(1) Section 14 of the Companies (Amendment) Act, 1986, is
hereby amended—
( a ) in paragraph (vi) by the substitution of "acquisition or
disposal" for "disposal"; and
( b ) by the insertion of the following paragraph after paragraph
(vi):
"(vii) the reasons for the acquisition, lien or charge, as the case
may be.".
(2) Part I of the Schedule to the Companies (Amendment) Act, 1986,
is hereby amended—
( a ) by the deletion in Format 1 of the balance sheet formats
of items A .III .7, B. III. 2 and H.I.V. 2;
( b ) by the deletion in Format 2 of the balance sheet formats—
(i) under "Assets", of items A. III. 7 and B. M.2 (Assets), and.
(ii) under "Liabilities", of item A. IV. 2; and
( c ) by the deletion of note (3) in the notes on the balance
sheet formats following the aforesaid formats.
(3) Part IV of the Schedule to the Companies (Amendment) Act, 1986,
is hereby amended—
( a ) by the insertion of the following paragraph after paragraph
32:
"32A. Particulars of any restriction on profits available for
distribution by virtue of section 224 (2) (b) (i) of the Companies
Act, 1990, must also be stated."; and
( b ) by the substitution of the following subparagraph for
subparagraph (3) of paragraph 39:
"(3) The amounts respectively provided for the purchase of the
company's share capital, for redemption of share capital and for
redemption of loans.".
COMPANIES ACT 1990 - SECT 234
Offences under this Part.
234.—(1) A company which contravenes any of the following provisions
shall be guilty of an offence, namely sections 207 to 211211, 218
and 222 to 224.
(2) Section 241 shall apply to an offence under this Part.